The research study covers the present scenario and growth prospects of the global silicon photonics market for 2016-2020. The report also segments the market on the basis of application into the three categories consisting of communications, consumer electronics and others, with communications accounting for 95% of the market. The use of silicon photonics components in the consumer electronics sector is limited to a mere 1% during the forecast period, however, this segment is expected to grow at a CAGR of over 48% during the forecast period. Other sectors such as medical, military, and robotics present considerable growth potential for this technology. The others sector will grow at a CAGR of close to 61% during the forecast period.
The silicon photonics technology can achieve speeds of up to 100 Gbps. The use of this technology will help increase power efficiency and improve the data transfer rate.
Silicon photonics technology is a novel approach to manufacturing optical devices from silicon and uses photons to transfer large volumes of data at very high speeds using extremely low power over thin optical interconnects instead of using electrical signals over a copper cable.
Technavio hardware and semiconductor analysts highlight the following four factors that are contributing to the growth of the global silicon photonics market:
- Need for higher network bandwidth
- Reduction in transportation costs and scalability beyond 40G
- Huge investments through public funding
- Silicon photonics will improve energy efficiency
Need for higher network bandwidth
According to Asif Gani, a lead analyst at Technavio for embedded systems research, “The growth in internet bandwidth is fueled by two factors which are the proliferation of smartphones, tablets, and wearables with increasing functionalities and the emergence of disruptive technologies that increase bandwidth use.
Silicon photonic devices are capable of transmitting data using far less power and of moving information much more quickly by achieving speeds of up to 40 Gbps. The primary reason a large number of companies are pushing to bring this technology to the market, is that silicon photonics is required for exascale-level computing.
Reduction in transportation costs and scalability beyond 40G
The adoption of silicon photonics has benefited the carriers largely. This network structure has allowed them to transport to multiple clients on a single wavelength and preserve their specific requirements. The overall cost of transportation has also fallen, as they don’t need separate wavelengths for separate clients, thereby ensuring efficient bandwidth utilization.
With silicon photonics, carriers are able to provide high-capacity services at speeds of 100G and above. The network architecture of silicon photonics is designed and optimized to support massive capacity services such as 400G or even terabit payloads. This was not possible with the previous generation technologies such as SONET or software-defined networking (SDN). This will create demand for silicon photonics devices in the global market.
Silicon photonics technology is also able to support the partitioning of the network into separate private networks. This allows the carriers to offer clients dedicated, specific, and configurable bandwidth with a guarantee on network capacity and enhanced performance for each client. This portioning does not affect the existing services or existing users in any way. Thus, clients can now have a dedicated and independent set of network resources.
Huge investments through public funding
Silicon photonics technology shows significant potential for increasing data transmission speeds at lower costs in the coming years. In 2015, IBM announced a breakthrough in the field of silicon photonics by introducing the first fully integrated wavelength multiplexed chip. This new device is designed to aid the production of 100 Gbps optical transceivers and permits electrical and optical components to function side-by-side in one package. This type of on-die integration will be important to the long-term deployment of optical technology over short distances.
Apart from IBM, companies like Intel, Luxtera, and many more are investing heavily in making silicon photonics more efficient and reliable. The efforts made by these companies have been noticed by government organizations and investors around the globe. The silicon photonics market is receiving support in the form of large investments. In July 2015, the US government announced an investment of over USD 600 million in the photonics industry as a step toward investment in US manufacturing. A large portion of this funding will be dedicated solely to the development of silicon photonics technology. “These investments, will help the rapid development of silicon photonics technology and thus will continue to drive the growth of the market during the forecast period,” says Asif.
Silicon photonics will improve energy efficiency
Photonics technologies form the core of today’s telecommunication and data infrastructure. They will be integrated into communications networks. The adoption of a range of photonic technologies in the communications sector will have a considerable impact on the energy efficiency of these networks. Industry experts have estimated that photonic transmitters, photonic tunable lasers, photonic receivers, and photonic multiplexing components will contribute to energy savings of almost 5%-10% by 2020 with the integration of photonics integrated circuits.
This is primarily because photonic components will reduce the need for cooling by allowing devices to operate at higher temperatures, as well as make electrical-to-optical conversion efficient by removing non-radiative recombination processes. The complete implementation of the photonics technology into the communications sector will increase the energy efficiency even further. In 2015, major players in the communications sector such as AT&T, Bell Labs, Huawei, and Chunghwa Telecom agreed to improve energy efficiency by adopting silicon photonics technology.